Contrasting SkyWater Technology (NASDAQ:SKYT) and AXT (NASDAQ:AXTI)

AXT (NASDAQ:AXTIGet Free Report) and SkyWater Technology (NASDAQ:SKYTGet Free Report) are both small-cap computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Earnings & Valuation

This table compares AXT and SkyWater Technology’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AXT $79.08 million 2.08 -$17.88 million ($0.40) -9.28
SkyWater Technology $286.68 million 1.33 -$30.76 million ($0.69) -11.71

AXT has higher earnings, but lower revenue than SkyWater Technology. SkyWater Technology is trading at a lower price-to-earnings ratio than AXT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for AXT and SkyWater Technology, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AXT 0 0 4 0 3.00
SkyWater Technology 0 0 4 0 3.00

AXT currently has a consensus price target of $5.38, indicating a potential upside of 44.88%. SkyWater Technology has a consensus price target of $13.25, indicating a potential upside of 63.99%. Given SkyWater Technology’s higher possible upside, analysts clearly believe SkyWater Technology is more favorable than AXT.

Profitability

This table compares AXT and SkyWater Technology’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AXT -21.01% -7.40% -4.76%
SkyWater Technology -10.73% -32.59% -6.66%

Institutional and Insider Ownership

49.5% of AXT shares are held by institutional investors. Comparatively, 70.0% of SkyWater Technology shares are held by institutional investors. 8.4% of AXT shares are held by company insiders. Comparatively, 42.6% of SkyWater Technology shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

AXT has a beta of 2.28, suggesting that its stock price is 128% more volatile than the S&P 500. Comparatively, SkyWater Technology has a beta of 4.18, suggesting that its stock price is 318% more volatile than the S&P 500.

About AXT

(Get Free Report)

AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.

About SkyWater Technology

(Get Free Report)

SkyWater Technology, Inc., together with its subsidiaries, operates as a pure-play technology foundry that engages in the provision of semiconductor development, manufacturing, and packaging services in the United States. The company offers engineering and process development support services to co-create technologies with customers; and semiconductor manufacturing services for various silicon-based analog and mixed-signal, micro-electromechanical systems, and rad-hard integrated circuits. It serves customers operating in the computation, aerospace and defense, automotive, bio-health, consumer, and industrial sectors. The company was incorporated in 2016 and is headquartered in Bloomington, Minnesota.

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